New York – Taxability of Supplies Used by a Commercial Dog Breeder

SALT Report 2578 – The New York Department of Taxation and Finance issued an advisory opinion regarding the application of sales and use tax to a commercial dog breeder’s purchases of dog food. The Taxpayer feeds the dog food to its breeding dogs and their puppies, which are later sold to the general public at retail prices and to dealers at wholesale prices. The Taxpayer requested guidance as to whether the dog food qualifies for the exemption for supplies used in the production of property for sale or for the exemption for property used or consumed in farming.

In its response the Department stated that New York tax law section 1105-B provides an exemption from sales tax for supplies used or consumed in the production of tangible personal property. However, the exemption is specific in the types of production activities that qualify, and breeding or raising animals for sale is not included in the list of exempt activities.

Additionally, New York tax law section 1115(a)(6)(A) provides a sales and use tax exemption for tangible personal property used or consumed in the production of personal property sale by farming. However, the exemption specifically states that “the breeding of dogs, cats and other pets or laboratory animals is not farming.”

As a result the Department concluded that the dog food the Taxpayer purchases to feed its breeding dogs and puppies is not exempt from sales tax because the exemptions under sections 1105-B and 1115(a)(6)(A) of the New York tax law do not apply to dog breeding. Furthermore, the Department stated that they could find no other exemption that would apply to the Taxpayer’s dog food purchases.

For Further Information

New York Division of Taxation – Advisory Opinion #TSB-A-13(14)S